Renewable energy is cheaper and healthier – so why isn’t it replacing fossil fuels faster? – The Conversation

Report on the Global Transition to Renewable Energy in the Context of Sustainable Development Goals

Executive Summary

The global energy landscape is undergoing a significant transformation, with renewable energy sources becoming more economically viable and essential for achieving multiple Sustainable Development Goals (SDGs). This report analyzes the economic, health, and climate benefits of this transition, highlighting its direct contributions to SDG 7 (Affordable and Clean Energy), SDG 3 (Good Health and Well-being), and SDG 13 (Climate Action). However, significant barriers, including regulatory delays and financial disparities, impede progress, particularly in developing nations. Overcoming these challenges requires robust international cooperation, aligning with SDG 17 (Partnerships for the Goals), to ensure an equitable and effective global energy transition.

Economic Viability and Progress Toward SDG 7

Cost Competitiveness of Renewable Energy

The transition to renewable energy is now driven by strong economic incentives, making clean energy more accessible and affordable. Solar and wind power are now less expensive than fossil fuels for utility-scale generation. This economic advantage is a critical enabler for achieving SDG 7 (Affordable and Clean Energy). In 2024 alone, global power generation from renewable sources resulted in an estimated US$467 billion in avoided fuel costs.

Global Growth in Renewable Capacity

The falling costs have spurred unprecedented growth in renewable energy deployment. Data from the International Renewable Energy Agency (IRENA) indicates substantial progress:

• Over 90% of all new electricity-generating capacity added worldwide in 2024 was from clean energy sources.
• A record 585 gigawatts of renewable energy capacity was added in 2024.
• By the end of 2024, renewable sources accounted for 46% of total global installed electric power capacity.

Contributions to Health and Climate Goals

Advancing SDG 3: Good Health and Well-being

Replacing fossil fuels with renewable energy yields significant public health benefits, directly supporting SDG 3 (Good Health and Well-being). The combustion of fossil fuels is a primary source of air pollution linked to severe health issues.

• Air pollution from fossil fuels was responsible for an estimated 5 million deaths worldwide in 2019.
• The use of natural gas in homes releases benzene, a known carcinogen, with exposure risks comparable to secondhand smoke.
• Studies have attributed 12.7% of U.S. childhood asthma cases to the use of gas stoves.

Addressing SDG 13: Climate Action

Fossil fuels are the leading source of greenhouse gases driving climate change. The transition to renewable energy is the cornerstone of global efforts to meet the objectives of SDG 13 (Climate Action). Electrifying sectors such as transportation and buildings, and powering them with clean energy, is a primary strategy for reducing carbon dioxide emissions, mitigating global temperature rise, and lessening climate-related health impacts like heat stress and the spread of disease.

Barriers to a Global Energy Transition

Regulatory and Political Hurdles

Despite the clear benefits, the deployment of renewable energy is hindered by systemic obstacles. In developed nations like the United States, regulatory inertia and political gridlock slow progress. Major energy projects face average permitting times of 4.5 years, with new transmission lines taking a decade or more to approve. Such delays represent a significant impediment to accelerating action on SDG 7 and SDG 13.

Financial Disparities in Developing Nations

A more significant challenge exists in developing countries, where the high cost of financing obstructs renewable energy projects. This disparity threatens to widen the gap in clean energy access, undermining SDG 10 (Reduced Inequalities). Key factors contributing to this problem include:

1. Higher Perceived Risk: Lenders have less experience with renewable projects compared to established fossil fuel infrastructure, leading them to perceive higher investment risks.
2. Weaker Guarantees: Government guarantees for renewable projects are often weaker than those for fossil fuel projects, increasing lender uncertainty.
3. Higher Interest Rates: Due to the elevated risk profile, lenders charge higher interest rates, which increases the upfront capital cost of renewable projects, even if their lifetime costs are lower.

With emerging economies expected to account for 85% of new electricity demand through 2027, addressing these financial barriers is critical to prevent long-term lock-in of fossil fuel infrastructure.

Strategic Recommendations and the Path Forward

The Imperative of SDG 17: Partnerships for the Goals

International cooperation, as envisioned in SDG 17 (Partnerships for the Goals), is essential to lower the cost of capital for renewable projects in developing economies. Governments and international development banks can de-risk these investments through measures such as providing public funds to cover partial investment risk, offering insurance, and ensuring stable, long-term energy policies. When investors are confident they will be repaid, interest rates fall, making renewable energy the most cost-effective option.

A Comprehensive Decarbonization Strategy

Achieving global climate targets requires a multi-faceted approach. Transitioning the power sector, buildings, and local transportation to renewable energy can address approximately half of current greenhouse gas emissions. The remaining emissions originate from hard-to-abate sectors, including heavy industry (steel, cement), aviation, and agriculture. Developing solutions for these areas will require sustained innovation and investment, reinforcing the importance of SDG 9 (Industry, Innovation and Infrastructure). Good governance, political will, and accessible finance are critical to ensuring a successful and equitable transition across all sectors.

Analysis of the Article in Relation to Sustainable Development Goals

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 3: Good Health and Well-being

   • The article directly connects the use of fossil fuels to negative health outcomes. It highlights that burning coal, oil, and natural gas releases pollutants that cause sickness and death, citing a study that attributes 5 million deaths worldwide per year to fossil fuel air pollution. It also links natural gas combustion in homes to childhood asthma.

2. SDG 7: Affordable and Clean Energy

   • This is the central theme of the article. It discusses the falling costs of solar and wind power, making them cheaper than fossil fuels. The article focuses on the global transition to renewable energy, the increase in renewable energy capacity, and the challenges of expanding its deployment, especially in developing countries.

3. SDG 9: Industry, Innovation, and Infrastructure

   • The article touches upon the need for infrastructure to support the energy transition. It mentions the long time it takes to permit and approve new energy projects and transmission lines in the U.S., which are essential infrastructure for deploying renewable energy on a large scale. This relates to upgrading infrastructure to support clean technologies.

4. SDG 13: Climate Action

   • The entire article is framed within the context of the “global fight against climate change.” It identifies fossil fuels as the leading source of climate-warming greenhouse gases and presents the switch to renewable energy as a primary solution to cut emissions and slow global warming.

5. SDG 17: Partnerships for the Goals

   • The article explicitly states that expanding renewable energy “will require international cooperation.” It highlights the financial barriers faced by developing countries and suggests that governments and international development banks must cooperate to lower borrowing costs and de-risk investments in renewable projects to ensure a global transition.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Targets under SDG 3 (Good Health and Well-being)

   • Target 3.9: By 2030, substantially reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination. The article’s focus on the “5 million deaths worldwide” per year from fossil fuel air pollution and illnesses like childhood asthma directly relates to this target.

2. Targets under SDG 7 (Affordable and Clean Energy)

   • Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix. The article provides statistics on the record growth of renewable energy capacity, stating that “over 90% of all electricity-generating capacity added worldwide in 2024 came from clean energy sources.”
   • Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy… and promote investment in energy infrastructure and clean energy technology. This is addressed in the discussion about the need for international cooperation to lower financing costs for renewable projects in developing countries.

3. Targets under SDG 9 (Industry, Innovation, and Infrastructure)

   • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes. The article’s mention of delays in approving “new transmission lines” and “planned new power projects” points to the challenges in upgrading infrastructure for a clean energy transition.

4. Targets under SDG 13 (Climate Action)

   • Target 13.2: Integrate climate change measures into national policies, strategies and planning. The article discusses the need for countries to “cut their greenhouse gas emissions” and overcome “political gridlock” and “regulatory inertia” to deploy renewable energy, which are key components of integrating climate measures into national planning.

5. Targets under SDG 17 (Partnerships for the Goals)

   • Target 17.3: Mobilize additional financial resources for developing countries from multiple sources. The article’s core argument about the challenges in developing countries is the “high price of financing” for renewable projects. It calls for international cooperation to lower these costs.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Indicators for SDG 3

   • Mortality rate attributed to air pollution: The article explicitly states, “air pollution from fossil fuels causes an estimated 5 million deaths worldwide a year.” This is a direct indicator for Target 3.9.
   • Prevalence of specific illnesses: The mention that “12.7% of U.S. childhood asthma cases” are attributable to gas stoves serves as an indicator of illness linked to fossil fuel use.

2. Indicators for SDG 7

   • Renewable energy share in total final energy consumption: The article provides several data points that serve as indicators for Target 7.2, including “renewable energy accounted for 46% of global installed electric power capacity” at the end of 2024, and “over 90% of all electricity-generating capacity added worldwide in 2024 came from clean energy sources.”
   • Installed renewable energy-generating capacity: The article notes a “record 585 gigawatts of renewable energy capacity added” in 2024.

3. Indicators for SDG 13

   • Reduction in greenhouse gas emissions: The article implies this as the primary indicator for climate action, stating that switching to renewables would “cut about half of today’s greenhouse-gas emissions.”

4. Indicators for SDG 17

   • Cost of financing for renewable projects: The article implies that the “weighted average cost of capital (WACC)” and “higher interest rates” for renewable projects in developing countries are key indicators of the financial barriers that need to be overcome. A reduction in these rates would indicate progress.
   • Financial savings from renewables: The article mentions that renewable sources “saved US$467 billion in avoided fuel costs in 2024 alone,” which can be an indicator of the economic viability and financial flows related to clean energy.

4. SDGs, Targets, and Indicators Table

Source: theconversation.com